Sorry for the long mail but could someone please be more specific and tell me
what exactly BLOB looks for in a Configured Linux Kernel tree and why?  
I've already explained  why  we use from the kernel tree..  If you want to know the specific files, look through the source.   

In "configure.in", I changed the --with-board=NAME to --with-board=lart.

Then in acconfig.h, I changed the #undef LART to #define LART and also defined CPU as SA1100

Then in "configure", I changed the --with-board=NAME to --with-board=lart and
--with-linux-prefix=/home/sridhar/linux-2.4.20 where i have a configured Linux kernel tree
but with not all *.c files available.  

Have you read the README file?? 
 
 Do not modifiy configure.in and acconfig.h.  
 
 Follow the instructions precisely and get blob working, before you  attempt to "optimize" the process.  
 
I won't help you until further until you *follow the instructions*. 
 
-ch